The Cause of Rising Youth Unemployment in Developing Countries: Failure of Education Systems or Labor Markets

Davendra Sharma

Abstract- Youth unemployment in developing countries is a growing concern, characterized by a significant gap between the number of young people entering the labour market and the available job opportunities. This issue is rooted in various socio-economic and institutional factors, with two key areas being the failure of education systems and the inefficiencies of labour markets. The mismatch between the skills provided by educational systems and those required by employers contributes to the rising unemployment rates among youth. Simultaneously, labour market failures, such as inadequate job creation, slow economic growth, rigid labour market regulations, and the prevalence of informal employment, exacerbate the problem. This study explores these interlinked issues, analysing how education systems’ lack of relevance to market demands and labour market inefficiencies contribute to the growing problem of youth unemployment in developing nations. It aims to provide insights into how both sectors must be reformed in a coordinated manner to mitigate this pressing issue. The research uses a variety of examples from developing countries to support these findings and offers policy recommendations that could facilitate effective solutions.